Match Each Definition with the Correct Term Below

question 14

Multiple Choice

Match each definition with the correct term below.
-Contingent liability

• A)Definite debts or obligations whose exact dollar amount cannot be known until a later date.
• B)Liabilities due beyond one year or beyond the normal operating cycle.
• C)Unsecured loans that are sold to the public ,usually through professionally managed investment firms.
• D)The cost of using money for a specific period.
• E)A potential liability that depends on a future event arising out of a past transaction.
• F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
• G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
• H)A legal obligation that does not meet the technical requirements for recognition as a liability.
• I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
• J)The interest cost for one or more periods when the principal sum stays the same from period to period.

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Definitions:

Carrying Amount

The value at which an asset is recognized on the balance sheet after deducting depreciation, amortization, or impairment costs.

Fair Value

Fair value is the estimated market price of an asset or liability, reflecting the value for which it could be exchanged between willing and knowledgeable parties in an arm's length transaction.

Statement of Financial Position

Another term for the balance sheet, it shows the company's financial situation by detailing assets, liabilities, and equity at a certain point in time.

Statement of Comprehensive Income

A financial statement that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, incorporating both income statement and other comprehensive income.